All you want to know about Software-as-a-Service

SaaS has changed the way technology is consumed. Here is a detailed overview on how SaaS will evolve in times to come

Diksha Gupta, TechGig.com

The way software is consumed has changed courtesy the fast evolution of SaaS (Software As A Service). SaaS is an alternative to the standard software installation in the business environment.
According to Tarun Wig, cofounder, Innefu Labs, instead of buying the licence to use the application and then paying for software maintenance to support it and keep it up-to-date, customer 'rent' the application on the vendor's infrastructure -- usually on a monthly or yearly basis.

"The SaaS business model has some clear advantages compelling the tech world to choose it over other models. The client always has the latest version of the product; it is easily configurable and takes less time to implement than other on-premise models. The cost of the application hosted using SaaS model covers the costs of the software, its ongoing operations and infrastructure," he told TechGig.com.

In simple terms, unlike the traditional model, rather than paying for building the server, installing software and configuration, the user here pays rent for the software being used.

SaaS allows complex and enterprise class products/features affordable and accessible for all -- be it retail or SME consumers. Apart from this, IT departments in companies -- big or small -- are reducing in size as most SaaS services offer customer support too. The SaaS-related offerings of pay-what-you-use reduce the overall cost of ownership by reducing the resources when demand is low.

Transformation of IT consumption

SaaS has led to a transformation in the way IT is consumed. Because one doesn't have to incur huge costs for software licences, SaaS increases software consumption.

Opex Vs Capex:
Traditional IT had up front capital costs (capex) for hardware, software licencing, air conditioning, chassis space and personnel. SaaS model (opex) has changed this and introduced pay-as-you-go model which allows minimal upfront cost and is spread over time. Also, it allows predictable enterprise IT spending.

Ongoing Improvement:
Year old or long product release cycle is a thing of the past and enterprise users demand constant improvements to the way they work - without radical changes that require retraining or disrupt productivity and more important that you'll find it's a great advantage to have your vendor improve features without having to install any software updates.

Simplicity:
For decades, enterprise software providers have added complex features into their products to meet every IT and user need. The mobile-first cloud-computing world is all about apps that do one thing really, really well. Simple, elegant products that are easy to use and easy to implement makes more sense than a complex, comprehensive solution with a long roll-out time and a steep learning curve.

User Experience:
Gone are the days when IT could mandate software solutions with a less than stellar user experience. Today, users adopt apps over enterprise-approved software if it makes them more productive and more mobile.

SaaS: Poised to grow further

Namana Mohan, general manager & practice head-Cloud & Mobility, HCL, says, "SaaS will grow by leaps and bounds. According to industry reports, SaaS products market in India is expected to cross $50 billion in the next 10 years, boosted mainly by massive rise in demand from small and medium businesses. India's advantage in engineering, inside sales, product management and mobile skillset creates a highly advantageous opportunity for Indian SaaS businesses to be profitable and scale quickly. Indian SaaS companies are expected to reach the $10 billion (Rs 67,085 crore) revenue mark by year 2025."

The SaaS market is huge in the country, but India is certainly not one of the first countries that adopted this cloud model. Rajesh Ranjan, general manager-Product Engineering Services and Cloud/ SaaS practice head, Happiest Minds Technologies, however, feels this is an advantageous situation for the country. "India has the advantage of moving in late, considering only the latest and the greatest in terms of adoption. Traditional market in India was always filled with offering from other established players in the West. But now, we have our own CRM, HR application, delivery subsystem and payment banking. With internet revolution in India, consumers have adopted SaaS in a big way and enterprises are not behind in the game. Even Tally, which was the leader in packaged accounting software, is now offering services on subscription and has found a huge market, fighting piracy in one front and creating opportunity in another."

Trends driving growth of SaaS in India

We are seeing services across the board being offered as SaaS - from hosting (AWS, Google Cloud and MS Azure) and office applications (MS Office 365 and Google Apps) to more business specific applications like accounting (Quick books) and ecommerce sites. As internet connections become faster, there will be lot more content based applications (like image and video editing) across industries.

However, if we talk of specific sectors that will drive the growth of this software distribution model, most experts believe the SMB segment of the country will be the frontrunner.

Namana Mohan from HCL says, "The SMB industry is driving the SaaS adoption in India. Sectors such as CRM, healthcare, HR and marketing are already using SaaS in a big way. Apart from these, in 2016, adoption would also increase in e-commerce, retail, manufacturing and startups."